Diversify funding sources for Free SHS – Manteaw

September 13, 2017

A policy analyst at the Integrated Social Development Center (ISODEC), Dr. Steve Manteaw, is calling for the diversification of the source of funding for the government’s Free Senior High School policy.

According to him, depending solely on the country’s oil proceeds to finance the program is unsustainable in the medium to long term.

The source of funding for the flagship education program has long been a matter of controversy even among top government officials.

It would be recalled that there was a public uproar when the Senior Minister, Yaw Osafo Maafo, told Citi News in an interview that the government was going to finance the program with the Heritage Fund, a fund into which a fraction of the petroleum proceeds is deposited for future generations.

His comment was later countered by the Finance Minister, Ken Ofori Atta, who in his delivery of the 2017 Annual Budget statement in Parliament, said that the program will be financed from the “Annual Budget Funding Amount (ABFA) and other domestic revenue sources.”

President Akufo-Addo, at the launch of the program at the West Africa Secondary School (WASS) in Accra, said the program will be financed from revenues from Ghana’s oil and mineral proceeds.

Dr. Manteaw told Bernard Avle on the Citi Breakfast Show that the cost of Free SHS program could be entirely sourced from oil proceeds, but that will negatively affect other critical governmental areas.

“You cannot spend everything on education alone, but the law allows you to spend substantially up to even 80% and use the 20% to do things in the other sectors.”

“At the current world market prices and current level of production, we are getting about GH¢1 billion annually, which will be enough to cover the Free SHS, but that will lead you no opportunity to do anything else; but funding Free SHS. And that for me will not be the best option and that is why are advocating for other sources of funding.”

“I agree with those who say we will get into sustainability challenges,” he said.

Increase VAT

Dr. Manteaw further called for a 0.5% increment of the VAT, to increase the country’s financial reserve to expand the scope of the program.

“This is the time to consider increasing the VAT from 2.5% to 3.0%. The 0.5% increase will not be felt much by Ghanaians, but it will give you sources that you wouldn’t want to use today, but invest, and in two years’ time when you are doing a coverage of all years, you would have enough money to ensure sustainability. We have to be creative,” he said.

The Free SHS program is estimated to cost government in excess of GH¢400 million to implement in the 2017/2108 academic year.